(May 21): A coalition of Tesla Inc shareholders is urging other investors to reject a US$56 billion (RM262.78 billion) pay package for chief executive officer Elon Musk in the company’s June 13 annual meeting, posing a threat to one of the world’s largest fortunes.

Amalgamated Bank, SOC Investment Group and six other signatories that hold a small portion of Tesla stock said Musk is distracted by his commitments to the five other companies he controls, and isn’t serving the electric-vehicle maker’s best interests. The group also urged shareholders to vote against the re-election of directors Kimbal Musk — Elon Musk’s brother — and James Murdoch.

“Tesla is suffering from a material governance failure, which requires our urgent attention and action,” the group wrote in an letter on Monday.

Musk’s pay package, which was originally approved by shareholders in 2018, granted the CEO equity awards as Tesla’s market capitalisation increased and it reached certain operational targets. Musk met all of the conditions, but in late January, a Delaware judge voided the compensation agreement over concerns it wasn’t in the best interest of shareholders.

Tesla’s board is putting the pay package to a vote for a second time to prove investors still support the deal. It has been urging investors to ratify Musk’s pay package, and has hired a strategic adviser to drive retail investor participation.

Many of the signatories sent an open letter to Tesla’s board expressing concerns over a year ago due to Musk’s many commitments, and asked for a meeting with board chair Robyn Denholm. She never responded, the group said.

Musk’s decision to buy Twitter, now called X, has also “played a material role in Tesla’s underperformance”. Additionally, the group raised concerns in Monday’s letter about Tesla’s lagging sales and disappointing first quarter.

“Even as Tesla’s performance is floundering, the board has yet to ensure that Tesla has a full-time CEO, who is adequately focused on the long-term sustainable success of our company,” the letter read.